Microsoft doesn’t allow developers to self-publish their games on the Xbox 360, nor will it be allowed on the Xbox One. There’s been much talk about this limitation, but few really understand what it means, or why that decision not only screws over indies on the Xbox One, but the PlayStation 4 and PC as well. Microsoft, in one very broad stroke, has made it much harder for smaller developers to operate in gaming as a whole.

You need to either pay us, or pay them

To explain why, I caught up with Brian Provinciano, who released the game Retro City Rampage on damned near every service and console there is. He gave an illuminating talk about what he learned from the experience, and he’s become an outspoken critic of Microsoft’s policies. His platform summary for Xbox Live Arcade was short, and to the point: “Most expensive, a bottleneck, damaged PR, hindered other platforms’ success.”

“Self-publishing basically means that the developer can release their game directly to the stores without a middleman,” Provinciano explained. “We're able to sign straight distribution agreements with them, we get a simple revshare, and that's that.” The problem is that Microsoft does not allow developers to self-publish, you have to have a third-party publisher, or you can be published by Microsoft Studios.

So you have to pitch Microsoft Studios if you want to be on Xbox Live Arcade, and the negotiations and contract portion of this process can take six to nine months, according to Provinciano, if not more.

“Like any publisher, Microsoft Studios takes more from you than a simple platform revshare,” he said. “In addition to their publisher cut, Microsoft Studios also requires at minimum a timed exclusivity, so you won't be able to release on other platforms day one.”

So you end up with less of the revenue for yourself, Microsoft gets a cut as the publisher and the platform holder, and you have to be exclusive to the platform for a set amount of time. Or you can go through a third-party publisher, since Microsoft will only allow companies that release retail games to have slots on Xbox Live.

Microsoft’s push for an all-digital future is fine, but if you’re an all-digital company? You better find a publisher who does release retail games, and be willing to give them a cut of your revenue if you want to release your game on Xbox Live. It’s a hopelessly backwards system.

Paying to avoid exclusivity

But you can go with a third-party publisher for your Xbox Live release if you want to avoid being forced into timed exclusivity. Here’s the catch: Most publishers can’t, or won’t, sign a deal to publish just on Xbox Live. They want a cut of everything your game sells, on every platform.

“They feel that if they're publishing your game, they want to be the end-all-be-all publisher,” Provinciano said. “They want to publish all platforms, even those which you could self-publish on.”

“Long story short, this means that on all other platforms, you're needlessly giving a chunk of your revshare to a publisher for nothing more than the ability to get your game onto Xbox and the freedom to release on the other platforms, which you can already self-publish on, at the same time,” he stated.

Think about how ****ed up this situation is: small developers end up in a situation where they have topay a third-party company to avoid Xbox exclusivity. Or they can avoid Microsoft's system altogether, leading to fans complaining that the game isn't on their favorite platform. Both the developers and the fans lose due to Microsoft's arbitrary rules.

“The average consumer assumes Microsoft's paying developers for exclusivity, when NOT ONLY is that NOT the case, it's completely flipped around. Developers are essentially the ones paying to AVOID exclusivity,” Provinciano explained, emphasis his. “Developers get a lot of negative PR and hate from fans when they announce that their game is coming to Xbox first. Fans slam developers for taking 'money bags' instead of supporting other platforms, which as you can see isn't what's going on at all. Many consumers perceive this as developers choosing Xbox because it's 'the better platform.' That's the intention.”

Other developers are talking openly about their disgust with Microsoft’s policies, including Oddworld Inhabitants’ Lorne Lanning. Sony put the latest version of Oddworld in its presentation, while Microsoft won’t let the game on the Xbox One unless Lanning is willing to bring in a company and give them a chunk of the profits.

Here’s the problem: The game has no need for a publisher. “Why do we need a publisher when we self-finance our games, we build our own IP, we manage our own IP and we've turned nearly two million units online as indie publishers sold - not free downloads?” Lanning asked in an interview with Eurogamer. “Why? What's wrong with us?” Right now the game simply isn’t coming to the Xbox One.

This policy has other unintended consequences, with publishers often “renting” their Xbox Live slotsto smaller developers for a straight payment. That system only works because Microsoft has created artificial scarcity with their online games, with rules that are designed to benefit big publishers.

You have to pay someone a cut of your revenue if you want to release on an Xbox platform, even if you have zero need for any of the goods or services being provided. Microsoft has it basically mobbed up: You need to pay a tithe to Microsoft Studios or a third-party developer if you want to be on the platform, and it's likely to cost you more money to avoid Xbox Live exclusivity. The digital future Microsoft is promising only applies when they want to limit how you play your games, if you're a purely digital company bringing your games to the Xbox One, it's going to cost you.

Microsoft stands alone

Regardless of Microsoft's promises at E3, the Xbox One remains a console that is openly hostile to smaller developers and indies. Sony threw a party at GDC to celebrate its relationship with smaller developers, inviting notable smaller developers and personalities to mingle and play games.

Sony's Adam Boyes listed the PlayStation 4's policies like the company was throwing down the gauntlet: Indies are allowed to publish their own games, so the only money paid out to Sony is the standard cut for the platform holder. You can update your game for free, as patches won't cost anything. If you have a good game and can't afford a dev kit, Sony will hook you up.

Microsoft's response: Why change what wasn't working? The system stacks the deck against smaller developers, and helps big publishers dip their beak into the work of indies who don't actually need their help. Microsoft is setting up a number of roadblocks to releasing your game on their service, and they're taking money away from indies in exchange for “services” they don't need. Developers are beginning to speak out against the practice, and many are simply turning their back on the Xbox One.

“Alternatively, when self-publishing on Nintendo or PlayStation for example, you simply make your game, submit it into their system, submit it into certification, get your full revshare and that's about it,” Provinciano said. Smaller developers increasingly don't need publishers, although Microsoft is trying to bully them into signing with one anyway.

After talking with a variety of small developers and, while many aren't comfortable with directly critcizing Microsoft, nearly all of them expressed their appreciation for Sony's approach. It allows them to make more money, to maintain control of their games, and to continue doing business. Microsoft's policy may make sense now, but it's only going to hurt them in the long run, as more developers speak out and leave Microsoft's platforms altogether.

It's time for the Redmond giant to realize the world has changed, and to change its policies in response. Forcing smaller developers to lose part of their profits and freedom to publishers just to be on your console is backwards, wrong, and borderline corrupt.

As it stands right now it is factual, if it changes at Build then success.

I went back and corrected it. I don't remember Microsoft ever putting out information about development on the Xbox One. Can you provide me with a link other than that. I don't trust sources right now because they have an agenda against Microsoft and it's not rational.

This is the only thing that I can find on the subject....

We're working on a plan for (sic). Xbox One is a platform that allows all creators, including those who work on games and apps, regardless of team size, funding, biz model, etc. to be a part of the future of Xbox One.

That was from Major Nelson. So, I would be very careful to assume anything right now as people are not going to trust Microsoft on anything, because they are angry that they thought they were getting their rights taken away.

The Internet is the worlds largest lynch mob and a lot of times it's simply undeserved.

Wow, that's quite enlightening. The comment about how it makes you think the developer chose to go with Microsoft for money. That is exactly what I have always thought - that they go with Microsoft on a timed exclusive for a bit of extra cash.

You can update your game for free, as patches won't cost anything.

I wonder if this is just for indies or if it will apply to any game on the PS4? One thing that really irritated me this generation was developers basically saying "we'd love to fix our broken game, but we can't due to Microsoft/Sony". Just let 'em release as many patches as they need damnit!

They haven't talked about the Xbox One Store at all. The only thing they said for the Xbox One is that they're going to have one single place for XBLA and XBLIG unlike on the 360. That to me means that the Xbox Store will be just like the Windows Store. In fact, the whole reason Xbox is now going to be a part of BUILD, when it has never been, is exactly because they're going to make it just like how it is on Windows and Windows Phone. That is, the above mentioned revshare, but that will probably be if you just want a non-Xbox Live supported game. I'm not sure how it works to get a Xbox Live Arcade type game on Windows 8 and Windows Phone, but then again, "arcade" titles don't mean "indie" anyways. When you're part of the Xbox Live Arcade brand MS pushes and markets your title as part of the deal so them asking for a bit more hoops for you to jump through makes sense to me.

Indie games aside, I expect the Xbox Store to be opened to 3rd party apps as well.

They haven't talked about the Xbox One Store at all. The only thing they said for the Xbox One is that they're going to have one single place for XBLA and XBLIG unlike on the 360. That to me means that the Xbox Store will be just like the Windows Store. In fact, the whole reason Xbox is now going to be a part of BUILD, when it has never been, is exactly because they're going to make it just like how it is on Windows and Windows Phone. That is, the above mentioned revshare, but that will probably be if you just want a non-Xbox Live supported game. I'm not sure how it works to get a Xbox Live Arcade type game on Windows 8 and Windows Phone, but then again, "arcade" titles don't mean "indie" anyways. When you're part of the Xbox Live Arcade brand MS pushes and markets your title as part of the deal so them asking for a bit more hoops for you to jump through makes sense to me.

Indie games aside, I expect the Xbox Store to be opened to 3rd party apps as well.

I am happy that they are dropping the titles. Instead of Xbox Live Arcade and Indie titles, just pull out the title so that they can just be games. There is no reason to separate them with titles because people will think they are of less value.

Lorne Lanning talked about the One in the OP...... Oddworld is a next gen release.

Who is Lorne Lanning and how does he know whats going on? Again, I wouldn't trust someone that has been out of the game business since 2001. Just like I don't trust Johnathan Blow to understand "cloud processing".

I am happy that they are dropping the titles. Instead of Xbox Live Arcade and Indie titles, just pull out the title so that they can just be games. There is no reason to separate them with titles because people will think they are of less value.

Who is Lorne Lanning and how does he know whats going on? Again, I wouldn't trust someone that has been out of the game business since 2001. Just like I don't trust Johnathan Blow to understand "cloud processing".

Are you serious? How about the Oddworld guys are actually releasing a game, are developers, know what the process currently is for the Xbox One and you are none of those/aren't doing any of those.

In contrast to Sony with its PlayStation Store, Nintendo with its eShop and Valve with Steam, Microsoft won't let independent developers self-publish on Xbox One.

Instead, they must seek a publishing deal either with Microsoft itself or a third-party - as is the case with Xbox 360 and Xbox Live Arcade currently.

When Shacknews asked if developers would still need a publisher to get content onto Xbox Live, Matt Booty, general manager of Redmond Game Studios and Platforms, said: "As of right now, yes. We intend to continue to court developers in the ways that we have."

He added: "I would also expect that for this new generation, that we're going to continue to explore new business models and new ways of surfacing content. But Microsoft Studios is a publisher that works with a wide range of partners, as do a lot of other people, to bring digital content to the box."

Microsoft's decision may make it much harder for indie games to appear on Xbox One than the PS4, Wii U and Steam, and it has already been questioned by developers. "Oh dear," wrote Thomas Was Alone designer Mike Bithell on Twitter. "So it looks like you won't be seeing #project2 on your Xbox One..."

And this, from Toki Tori 2 developer Two Tribes, also on Twitter: "No self publishing on Xbox One probably means no Two Tribes games. This was really a chance for Microsoft to fix the broken XBLA setup. :("

Just Add Water's Stranger's Wrath HD was one high-profile game that failed to release on Xbox 360 because of Microsoft's strict rules.

Sony in particular has made a strong indie game push in recent months. Two weeks ago it launched an indie game category on the PlayStation Store. Before that it secured the release of a number of eye-catching indie games for PlayStation, including Luftrausers, Hotline Miami and the aforementioned Thomas Was Alone. Eurogamer's Jeffrey Matulef investigated the Japanese company's new-found love of all things indie in a feature published last month.

This this story true, its unlikely for MS to change it,and existing big 'approved' publishers are liking the xbox one policy and putting pressure to MSFT to keep it this way.

Why? becasue in this policy, MS creates a closed 'competition' between publishers,the approved publishers are abosulutely delighted with this as there will be no new rivals will emerges on market,and anyone who want to enter the marketplace must join existing publishers, more power for existing publishers.

And if the approved publishers wish to, they can form a unified cartel that will steer the marketplace as they see fit,like absolute profits maximization, that imposible to achieve if theres independent publisher around.

Perhaps as compensation those publishers will pay a bit more royalties to microsoft.

Although I have been vocal about the DRM & 24hr authentication, their relationship with indies is what bothers me most about the X1. My stance on the DRM is more or less the principles behind those decisions and what is ultimately best for the gamers more than it ever impacting me personally. Like I've said before, I have had an unlimited always-on internet connection for a long time & I don't buy 2nd hand games, but I still don't agree with them.

Indies though are far more important in my eyes to the success of either the PS4 or X1. The **** Cliff B comes out with that AAA are going to exploit gamers even more next gen because of the removal of DRM is absolute nonsense. The man was so bold as to say that he only cares about money last night. That type of developer doesn't care about your experience when you game & quite frankly it's nothing but a good thing he is unemployed & left Epic. Otherwise we'd still be playing GoW slightly updated edition for the next 5 years. It's too bad that People Can Fly will now fill that void

I'm sure I don't represent the majority when it comes to taste in games, but what I do see is an increase in those who agree with my thoughts the past few years. That probably means I'm lumped in with the "hardcore" crowd that is ahead of the gaming trend curve. For years (and even today still), most people seem to only care about Battlefield/CoD (insert your favourite FPS franchise) & sport titles. The stereotypical dude bro gamer. Now though you are starting to see more and more people outgrow that trend and want something fresh. The Last of Us, Bioshock and Tomb Raider are all testament to that this year so far. It's not enough though and the real innovation is much further down the scale. Cliff B said that we're going to see an increase in mobile/PC games with the changes made yesterday. He says that like it's a bad thing? Maybe it should ring alarm bells to him that chasing the same genre is the problem & not the consumer to blame.

Microsoft for many years saw & explored the indie scene with support on XBLA. They took the initiative to bring Minecraft to XBLA (albeit pretty late), and it boosted the sales another 6 million. Sony too had some hits with PSN on PS3 with Journey/Unfinished Swan/PixelJunk. They are only the tip of the iceberg though and it's thanks to indies that PC gaming has been rejuvenated the last few years IMO. Microsoft either lost interest or began to focus all their efforts on X1 & have forgotten about indies at this stage though. Every interview coming out is in a negative spotlight what it's like to work for them. I do think some of it is blown over the top & some restrctions or "essentials" are required to keep XBLA a smooth experience.

Sony are definitely on the right track when it comes to PS4 & indies. Their E3 briefing gave them the spotlight they deserved whereas Microsoft said nothing. Killing XNA/refusing self publishing is really going to come back & hurt them. If they could just for one second forget about exploiting gamer's wallets & giving back to gaming maybe they'd understand.

I know about Oddworld from 2001. That doesn't mean anything and that article doesn't explain anything either.

For example that quote I got back from Major Nelson conflicts with what that eurogamer article says.

I know, its hard for you to understand, but I want facts from Microsoft. That is the only thing that matters. I don't care about what some developer says because they are simply not in the know.

Facts are all that matter and the source of those facts are Microsoft since they built the console, everything else is irrelevant.

We know for example that many developers at GDC 2013 had no idea what was going on with Microsoft, it was all speculation and rumor. I want facts from the source. The closest I could find was what Major Nelson said.

"We're working on a plan for (sic). Xbox One is a platform that allows all creators, including those who work on games and apps, regardless of team size, funding, biz model, etc. to be a part of the future of Xbox One."

From Major Nelson (who works for Microsoft) and we know that the build conference is coming later this month and hopefully should have more information on development for the Xbox One.